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Now that's some irony! We call them "Banana Republics" because of how they were dominated and exploited by American fruit companies, with support from the US government, up to and including building private armies and calling in the CIA to do coup d'etats. The only thing new here is that the Republicans are normalizing doing the corruption to ourselves instead of just to others.
At least Franklins Expedition didn’t fail for nothing.
You are more technically correct, but in common parlance for those who do not seek out to become more informed about history and politics beyond high school, the vast majority of I guess 'laypeople' just think that terms like banana republic and third world country just mean a poor country with unstable government, despite those terms not really actually meaning that.
The reasons why this happens are hilariously also basically the Republicans fault:
Anti Intellectualism is a big thing for most of them culturally, and Republican policies demonstrably have seriously worsened the quality of a K-12 education all across the country, and kept many families poor and unable to access higher education.
... and it is nearly always Republican talking heads and political figures which spent decades being the most prolific users of those terms incorrectly, while televised and in print or later online journalism, contributing largely to normalizing the incorrect usage of these and other similar terms.